A payment gateway can be thought of as a technological overlay working on top of a merchant account or a PSP. It is a technological component required to securely collect all the transaction details and pass them to the payment processor or acquiring bank. Customers making online payments do not interact with your merchant account or PSP. Instead, they interact with the payment gateway. In general, a payment gateway can be associated with credit card payment forms on the front end, and transaction encryption and verification systems on the backend. 

Most merchant account providers and PSPs offer their own payment gateways on top of their services. But if you own a merchant account, you have a much bigger choice of payment gateways you can connect to. In most cases, merchants who own a merchant account can choose if they want to use an out-of-the-box solution provided by the payment processors or integrate with a third party payment gateway, for instance, API. This creates a lot of room for customization and optimization of the payment gateway’s UX and performance. 

On the other hand, if you are collecting payments through a PSP, more often than not, you are forced to use an out-of-the-box solution. As a merchant, you need to adjust and fit into the set-up provided by the payment service provider, not the other way round. This leaves you with very little room for customization, especially for UX and performance optimization. If your PSP is offering a lot of integrations with the most popular CMS and e-commerce platforms, this might be very convenient. But if you are using a custom website or app developed by your in-house team, you may encounter a problem.